Philippine GDP grows 2.1% in Q3, dragged by high inflation

The Philippine economy experienced its slowest quarterly growth since the COVID recession in the third quarter of 2026, according to government data released on Monday. The country's gross domestic product (GDP) expanded by 2.1% year-on-year, falling short of the anticipated 3.0% growth rate and down from the 2.3% increase in the previous quarter.

On a quarter-on-quarter basis, GDP growth slowed to 0.1%, missing expectations of 0.9%. This marks a new low for the Philippine economy in the post-COVID era, as it confronts high inflation, sluggish agricultural output, and weakening industrial production. The Middle East conflict has led to high oil prices, which are particularly challenging for a country that heavily relies on oil imports.

This, in turn, has contributed to steeper domestic inflation, prompting the central bank to implement additional interest rate hikes. Furthermore, a controversial scandal surrounding public infrastructure spending, centered around a probe into flood control projects, has resulted in delays for additional fiscal spending, further dampening overall economic growth.